THE builder Brymor was a “victim of inflation” when it downed tools and went into administration, a developer has said.

The Hampshire-based construction company built landmarks such as Southampton’s Horizon Cruise Terminal and had the contract for Southampton FC’s new gym at Marchwood.

The assets of the Brymor Group have been bought from administrators, saving 107 jobs – but unsecured creditors are “highly unlikely” to receive any of the estimated £16million they are owed.

READ MORE: Builder's debts of £16m to go unpaid - and staff are owed a month's wages 

Richard Carr, chief executive of developer Fortitudo – for whom Brymor was building a block of flats and commercial units on Poole Quay – said his project should now be finished in February or March 2023, around four months behind the original schedule.

“Clearly what’s happened is unfortunate, not for me but all the other clients of Brymor, and in a perverse sort of way I have some sympathy,” he said.

“They’re a victim of inflation and this is the problem when you’re the entering into a fixed price build contract for an 18-24 month period but cost inflation is rising higher than the inflation figures we get told by the government – albeit materials seem to be settling down again.”

He said the price of steel had risen from £800 a tonne to £1,600 in 18 months.

“It’s not just a UK problem either. If you read the international press as I do, it’s a global problem with contractors,” he said.

He said Fortitudo was “virtually at an agreement” with the new ventures set up by Winchester-based Portchester Equity to take over the Brymor business. This would involve many of Brymor’s original subcontractors returning to the Poole site.

Brymor, based at Denmead near Portsmouth, was working on around 13 sites at the time it went into administration.

Administrators from Alvarez & Marsal said the company had experienced difficult trading conditions because of Brexit, Covid-19 and cost inflation.

Brymor’s bank Santander is first in the queue of creditors. The business had a £2million coronavirus business interruption loan and an £850,000 overdraft.

The two main Brymor companies left a long list of unsecured creditors who are estimated to be owed around £16million.

READ MORE: More than 100 jobs saved at civil engineer that worked on Southampton cruise terminal and dock

Christopher Parsons, associate solicitor in corporate restructuring and insolvency at Southampton law firm Paris Smith, said: “Suppliers will always have concerns when any business enters an insolvency process whether or not they will recover those sums owed to them, but there are things that can be done to mitigate this risk.”

Seeking a valid security over the business in question was a costly option but could enhance the prospect of recovering money, he said.

“Keeping on top of credit control is important. Alongside this, regular credit checks and conversations with customers should take place, to keep suppliers appraised of their customers’ financial circumstances. An early discussion regarding finances may in itself resolve any cashflow concerns,” he added.

“Practically this might cause issues or go against normal practice, especially in construction, however by making sure that any credit provided is properly controlled, this will reduce any risk of non-payment occurring and will hopefully prevent any knock on issues with the supplier themselves should their customer be considering their insolvency options.

“Suppliers may also wish to consider at the onset whether they seek personal guarantees from directors and/or third-party businesses and/or the option of obtaining suitable insurance products to cover any risks of repayment not taking place.”

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